Tiong Nam to build RM40 million warehouse

KUALA LUMPUR: Tiong Nam Logistics Holdings Bhd plans to build a RM40 million warehouse on a 23.76 acre leasehold  industrial site in Shah Alam, Selangor, a crucial move to capitalise on the gradual recovery in global trade amid an improving economic backdrop.

In a statement to the exchange on April 9, Tiong Nam said the location and size of the land was ideal for the long-term strategic growth of the company. At the same time, a bigger warehouse will enable the firm to secure bigger projects going forward.

"Tiong Nam Group’s warehouse capacity will be increased upon completion of this warehouse construction,"  Tiong Nam said.

The 23.76 acre site, purchased from Goodyear Malaysia Bhd for RM31.15 million, constitutes a portion of Shah  Alam's Section 15 enclave.

Tiong Nam's unit - Japan Original Electric (M) Sdn Bhd had on Thursday, signed a sale and purchase agreement with Goodyear for the land acquisition. The exercise is due for completion within one year from the date of the agreement.

The buyer will finance the acquisition of the site via a combination of the group's internal funds and bank  loans.

According to Tiong Nam, the initial phase of the yet-to-be-approved warehouse construction project involving some  100,000 sq f at an estimated cost of RM 10 million, will start within six months after the completion of the land  acquisition. Construction of the phase is due for completion within 18 months thereafter.

Construction of the remaining 300,000 sq ft is expected to begin within three years after the completion of the site acquisition.